Companies to Follow Procedure for Transmission of Shares while Transferring Shares to IEPFA: MCA Clarification
The MCA has issued clarification vide General Circular No. 7/2017 dt. 5 June 2017 that companies should follow the procedure applicable for Transmission of Shares while transferring shares to the IEPFA, since the same is happening due to operation of law and hence duplicate shares need not be issued in such cases.
Clarity has been sought by stakeholders w.r.t. issue of duplicate shares under Rule 6(3)(d) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.
It has been stated that since transfer of shares to IEPF under section 124(6) of the Companies Act, 2013 read with rules referred to above takes place on account of operation of law hence the procedure followed during transmission of shares may be followed in such cases and duplicate shares need not be issued in such cases.
The suggestion made by the stakeholders has been examined in the Ministry and it is clarified that the procedure similar to what is followed in case of transmission of shares may be followed by companies while transferring shares to IEPF Authority pursuant to section 124 (6) read with applicable rules.